Protein phosphorylation on tyrosine residues plays an important role in the regulation of many physiologic processes. The dephosphorylation of these proteins is regulated by a group of protein tyrosyl phosphatases (PTPs) which have generally not been well studied. In hematopoiesis, homeostasis is maintained by the actions of growth factors and cytokines, most of which signal through protein kinases or receptor associated protein kinases. The erythropoietin receptor associates with the JAK2 tyrosine kinase upon binding of erythropoietin. Abnormalities in PTK pathways can result in hematopoietic failure or in diseases of hyperproliferation such as erythrocytosis or erythroleukemia. The overall goal of this application is to define how the SH2 containing non- transmembrane tyrosine phosphatase, SHPTP1, controls EPO receptor signal transduction and how binding of the EPO receptor to SHPTP1 controls SHPTP1 activity. The applicant proposes to define the mechanism of regulation of JAK2 by SHPTP1 in molecular detail. The exact tyrosine residue to which SHPTP1 binds in the EPO receptor will be defined. The applicant will also determine whether a familial erythrocytosis syndrome is due to abrogation of the EPO receptor/SHPTP1 interaction. He will ask if sustained JAK2 expression is sufficient to confer EPO hypersensitivity and whether the inactivation of JAK2 by SHPTP1 requires other interacting proteins. The biochemical basis for differences in specificity between SHPTP1 and its close relative, SHPTP2, in EPO receptor signalling will be determined. He will also determine whether SHPTP1 regulates signalling molecules other than JAK2 and pathways other than proliferation. The in vivo significance of the SHPTP1 EPO receptor interaction will be determined by creating transgenic mice that express EPO receptors unable to bind SHPTP1. Finally, the precise sequence determinants for phosphotyrosyl peptide binding to the amino terminal SH2 domain of SHPTP1 will be defined and the mechanism by which the SH2 domains of SHPTP1 basally repressed PTP activity will be elucidated. The results of the proposed studies may yield new insights into how PTPs contribute to the control of normal hematopoiesis and its disruption in human disease.